SEC share class exams to now take tougher approach (IGNITES)

SEC exams will continue to zero in on firms and fund companies with investors inappropriately placed in high fee share classes. With the SEC’s self-reporting program ending in 2020, FrontLine’s Founder and President Amy Lynch expects that reviews of share classes would now occur in every exam of a mutual fund company, broker-dealer or distributor, and firms with violations will likely face charges and fines. Ms. Lynch adds that the SEC would expect firms to take measures such as using breakpoint calculators to determine investor’s needs and should ensure that all fees are clearly and accurately disclosed. See IGNITES (subscription required), “We’re Not Done With Share Class Exams: SEC”